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Fischler responds to NGO criticisms of CAP reform

26 September 2004

Addressing NGOs on the issue of CAP reform on June 18 th 2004, Agriculture Commissioner Franz Fischler argued that it was "meaningless to attempt to debate or evaluate the impact of CAP reform in abstract terms?.

He maintained that it must be evaluated with respect to the clear objectives set out, namely that:

  • CAP reform should make EU agriculture more competitive than before;
  • CAP reform should make EU agriculture more environmentally friendly;
  • the CAP should become more acceptable domestically;
  • the CAP should be more acceptable internationally.

With regard to the international acceptability of the CAP in a WTO context, CAP reform had provided additional flexibility in the EU’s position on domestic support, market access and export subsidies, and had "changed both the nature of the debate and the balance among negotiating partners?.

On domestic support the issue was "not how much is spent on the CAP but where this money goes and how it is spent?. Commissioner Fischler highlighted the decline of export subsidies and storage costs within the EU budget since 1992 and the increased role of direct aid payments and rural development expenditures (a logical consequence of the shift away from price support to direct aid payments) and asserted that this trajectory for reform made EU agricultural support less trade-distorting.

Turning to the external impact of the CAP on developing countries he focussed on export subsidies and the opening up of EU markets: "the EU net export position has declined in every single sector since 1990?. This was due to "the combined and cumulative impact of the reform proces "shich has resulted in lower domestic support prices, lower market prices, a reduced exportable surplus, lower production and higher consumption; there was no more "dumping?, since "clearly the implications of lower exports is also lower pressure on world market prices?.

Commissioner Fischler further sought to argue that EU policies were by no means the only factors impacting on world market prices, citing the examples of rising Brazilian production in the sugar sector and trends in Chinese consumption in the cotton sector to illustrate this point.

The world was now ready for "the complete elimination of all forms of export subsidisation?. However this had to be achieved on the basis of "parallelism?. This echoed the Commission?s earlier message to the Canadian Grain Council On the issue of market access Commissioner Fischler maintained that in a WTO context "most of the benefits from market opening [are] going to come from increased opportunities for trade among the developing countries themselves?. He once again called for other developed countries to follow a similar approach to the EU’s EBA initiative. However he recognised the need for each country to determine its sensitivities and for a formula to be found which allowed these sensitivities to be accommodated.